Water: Opportunities for Impact (Nov 10)
- 1. Water: Opportunities for Impact 13 November 2010
- 2. Lab2Mkt Program (Technology Commercialization via Spinoffs) Pool of Well- Technology defined Invention / Market Innovation / Needs IP Incorporate Valid Biz Model Launch Technology PoC, Prototype, Preliminary Pre-production, Beta customers, Commercialization ‘PoC’ Potential Business Model, IP Distribution channels, Business Opportunities Gap Markets Creation, Alpha Customers Plan, Expand Team Seed Round 1 Angels / Seed Round 2 Early-stage VC DSIR Notifications “Knowledge for Equity” “Scientist Entrepreneur” http://www.venturecenter.co.in/lab2mkt.php 2
- 3. Competencies Technologies Products • Materials & Methods • Prototype • Product Focus • Insights • Pilot plant • Service • Potential applications • Potential market • Well-defined market • Process/Product • Manufacturing & • R (&D) Engineering Marketing Activity • Create IP • Strengthen IP • Monetize IP Value • Define • Discover • Deliver Prop. (business model) Scientific Opportunity Commercialization Proof-of-Concept Knowhow Identification (‘Lab2Mkt’) http://www.venturecenter.co.in/poc.php 3
- 4. Goal: PoC projects Spinoffs Match the following Market insights Scientific competencies Technology-based solutions Material, chemical & biological sciences (Venture) investment opportunities Candidate: Water ~ $500B industry worldwide Significant role for technology ‘The Next Oil’, ‘Blue Gold’, … 4
- 5. Note: Water Enthusiasts, NOT Experts! What we’ve spent time on Secondary market research Technology perspective Material science Top-down / analytical approach What’s missing? Primary market research Field experience Industry professionals, entrepreneurs, NGOs, policy-makers, … Unsavory bits 5
- 6. Today’s Agenda Global markets Overview Market segments Indian markets Overview Market segments Investing in water NOT Covered • Infrastructure / EPC Opportunities for impact • Public health Pricing • Climate change Technology 6
- 7. Global Water Markets 7
- 8. No Shortage of Water ?! Grail Research Water-The India Story 8
- 9. (Affordable, potable) Water is Scarce http://www.unep.org/dewa/vitalwater/article69.html 9
- 10. Water Usage: Agriculture Industry Domestic Industrial Agriculture Developing Countries Domestic Industrial Agriculture Developed Countries Lux Research 2008, Grail Research Water –The India Story 10
- 11. Water is a ~ $500B Industry Worldwide Expected growth of 6-7% p.a. $1T market by 2020 11
- 12. Municipal Utilities: 50-70% of Total Market 12 http://www.globalwaterintel.com/archive/8/10/general/the-global-water-market-a-slow-business-with-pockets-of-action.html
- 13. Growth Drivers: Population, Industrialization, Urbanization, Pollution, Irrigation, Westernization, … http://www.globalwaterintel.com/archive/10/7/market-insight/next-big-thing-water.html 13
- 14. Advanced Water Treatment Sam Report Water A Market of the future 2010 14
- 15. Desalination (Issues: Capex, Energy, Wastewater) http://pubs.acs.org/cen/business/87/8742bus1.html 15
- 16. Indian Water Markets 16
- 17. $30B - FY2012 (Majority: Agricultural/Municipal) http://www.dnaindia.com/money/report_water-presents-a-deluge-of-opportunity_1400853-all 17
- 18. Water Demand / Usage: 80% for Irrigation Year 2010 Use Surface water Ground water Total water use km3 km3 km3 Irrigation 330 213 543 Domestic 23 19 42 Industries 26 11 37 Power 14 4 18 Inland Navigation 7 7 Environment & Ecology 5 5 Evaporation Losses 42 42 TOTAL 694 Water resources of India , Current Science, vol.89, No.5, 10 September 2005 18
- 19. What To Expect As We Manufacture More Stuff Nalco, Freedonia, 2006 19
- 20. Differing Degrees of Use & Reuse Avg Vol of WW/unit of product % Reuse Industry achievable Thermal Power Plant 1550000 L/hr/MW 98 Pulp & Paper 2500000 L/ton 50 Iron & Steel 1500000 L/ton 40 Pharmaceutical 45000 L/kg 40 Distillery 15 /L of alcohol 25 Textile 250 L/kg of cloth 15 Tannery 34 L/kg of raw hide 12 NATIONAL WATER MISSION under National Action Plan on Climate Change 2008 20
- 21. Inefficient Use & Reuse: Agriculture, Wastewater http://www.grailresearch.com/pdf/ContenPodsPdf/Water-The_India_Story.pdf 21
- 22. A Wide Variety of (Supply & Demand) Options http://www.mckinsey.com/clientservice/water/charting_our_water_future.aspx 22
- 23. Grand Challenges: Water In India Efficiency (reduce demand) Irrigation Wastewater treatment Infrastructure (40%+ water lost to leakage ?!) Availability (increase supply) Water harvesting Desalination Purification (contaminants: heavy metals, pesticides, effluents, ...) ‘Virtual Water’ Embedded water in exported goods Eg: 1tonne of cloves = 61,000 m3 of virtual water http://dst.gov.in/scientific-programme/plan-document.pdf, http://www.ias.ac.in/currsci/oct252007/1093.pdf 23
- 24. Investing in Water 24
- 25. A Bull Market in Water http://www.excelwater.com/2008-goldman-sachs-water-primer.pdf 25
- 26. Investing Across the Water Value Chain Sam Report Water A Market of the future 2010 26
- 27. Plethora of Investment Options Indices/ETFs PowerShares Water Resource Portfolio Claymore S&P Global Water Index Fund First Trust ISE Water Index Fund Listed companies 400+ publicly traded ‘water’ stocks on global exchanges M&A, IPO, municipal bonds, … Private companies Private Equity Venture Cap ($150M - $250M invested in water startups each year) PoC/Lab2Mkt http://www.excelwater.com/2008-goldman-sachs-water-primer.pdf 27
- 28. Water Startups funded by VCs in 2009 Company Funding (U$M) Water Sector Country Aquapure 0.7 Mechanical Israel BPT 12.0 Filtration Israel Checklight 2.0 Contaminated Detection Israel Inge AG 6.9 Filtration Germany Microvi Biotech 1.0 Purification US Nordaq 0.7 Filtration France P2i 6.7 Filtration UK Rotec 0.1 Filtration Israel Checklight 0.5 Contaminated Detection Israel EcoSolids Intl 1.1 Biological UK Guang Bossco EPT 2.9 Other China HydroPoint Data Syst i20 Water 8.0 6.3 Smart Metering And Control Smart Metering And Control US UK Watch: Shaw Water Engrg 1.2 Contaminated Detection UK Sorbisense 0.5 Contaminated Detection DK WaterHealth India 2.6 Purification India Israel & Xeros 1.5 Water Saving Appliances UK Singapore Advanced Hydro 0.5 Filtration US Amiad Filtration Syst 9.0 Filtration Israel AtraNova 0.7 Mechanical UK Bluewater Bio Intl 3.2 Biological UK Oasys 10.0 Desalination US Pump Engineering Inc, Desalination US AquaVenture 15.0 Desalination US Triton-Format 12.0 Other Germany Water Health Intl 10.0 Purification US Micromedia Filtration 3.0 Purification US HyrdroPhoton 2.0 Purification US http://www.greentechmedia.com/articles/read/KPs-Water-Investment-APTwater-Seeks-Funding/ 28
- 29. Water Investments in India Stocks IPO:VA Tech Wabag (NSE: VATECH) raised ~ Rs 470 crore Thermax,Tata Chemicals, … (but what % of value is water-related?) PE Aqua Designs (Rs 55 cr from Peepul Capital) UEM Group (Rs 90 cr from India Value Fund) Concord Enviro Systems (Rs 45 cr from Sage Capital) VC Environment Planning Group Limited (Acumen Fund) Sarvajal (Piramal) VC Circle 29
- 30. Food – Water – Energy Nexus IBM GIO report
- 31. Opportunities for Impact - Pricing 31
- 32. Water Pricing: Too Cheap? Sam Report Water A Market of the future 2010 32
- 33. Water Pricing: Dump At Will 10 Sewer Rates Water Rates 8 Price $/m3 6 8.83 4 0.66 1.75 2.2 2 3.58 3.12 1.42 2.03 1.26 0.24 0.16 1.03 0.12 0.27 0.35 0.49 0 0.08 Water Deluge of Opportunity, Kotak Securities 33
- 34. What If Water Cost 10x? 100x? UN: “Clean Water is a Fundamental Human Right” 34
- 35. Venture Opportunities Metering/Billing Hardware, software Testing/Diagnostics Real-time, affordable Pricing algorithms Availability, quality, efficiency of use/reuse, opportunity cost, etc. Transport! S2C Global: Sell water from Alaska in Mumbai (transport via VLCCs) http://www.water-analyzers.com 35
- 36. Opportunities for Impact - Technology 36
- 37. Water Technology – Goals, Categories Purify water Potable water Other domestic, municipal use Biological Industrial use Treat, reuse wastewater IT Material Municipal Inter- disciplinary Industrial Reduce water loss, theft, wastage Electro- Chemical mechanical Analyze, test water 37
- 38. Ideas for Tech Products/Ventures … Hydrocarbon removal / storm water treatment Residential & industrial storm water runoff Low energy + High flow rate + Custom solutions Heavy metal removal Regional contamination (eg. Arsenic in West Bengal) Add-on modules to home water purifiers? Effluents (eg. Mercury from coal-fired power plants) An extra phase in an ETP ? Evaporation losses Dams & reservoirs Especially in summer! Significantly large (vs. domestic/industrial water use) 38
- 39. … Ideas for Tech Products/Ventures Flood protection Inflatable bags with super absorbing polymers Leak detection & prevention Municipal distribution systems Energy-Water nexus Energy is needed to capture, purify, transport and use water Water is needed to extract, process and refine fuels 39
- 40. Where Are The Real Opportunities? Anand Prakash, FE Clean Energy Asia “Water is like waste. Anybody living in any city in India knows that this is the future. But the problem for water is same as problem for electricity in dealing with municipalities . . . . . . . so while the opportunity is tremendous, I do not know when it is going to turn into a viable business model.” Asit Biswas, Winner of the Stockholm Water Prize “The problem we have is not scarcity but mismanagement. The solution to shortages is simple: Water must have a price. Anything that is free won't be used prudently.” 40
- 41. Learn more: Books @ VC Library http://www.vcenterlibrary.org 41
- 42. Learn more: Reports @ VC Library McKinsey DST HSBC Artemis Project http://www.vcenterlibrary.org 42
- 43. Next Talk: (60) Water Technologies/Startups (Tentative: Monday, December 20) 43
- 45. Thank You. [email protected] Slides: http://venturecenter.co.in/research.php 45
- 46. Climate Change Water Stress & Scarcity http://theartemisproject.com/research-reports/ 46
- 47. Poor Diversity of Water Supply http://www2.luxresearchinc.com/water.html 47